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The Basic Rules of Nursing Home Medicaid Eligibility in Georgia
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The Basic Rules of Nursing Home Medicaid Eligibility in Georgia
For all practical purposes, in the United States the only "insurance" plan for long?term institutional care is Medicaid. Medicare only pays for approximately nine percent of skilled nursing care in the United States. While the long-term care insurance policies are improving, many discover either they cannot medically qualify of the policies are too expensive. The result is that most people pay out of their own pockets for long?term care until they become eligible for Medicaid. While Medicare is an entitlement program, Medicaid is a form of welfare -- or at least that's how it began. So, many will tell you , that to be eligible, you must become "impoverished" under the program's guidelines. THIS IS NOT TRUE!
For most individuals, the object of long?term care planning is to protect savings (by avoiding paying them to a nursing home) while simultaneously qualifying for nursing home Medicaid benefits. Fortunately, through a process referred to as Medicaid Planning, the vast majority of individuals can qualify for Medicaid assistance. Medicaid Planning is very similar to Estate Tax Planning -- you take advantage of all the exceptions and exclusions that the regulations lawfully allow. The goal is to rearrange your finances to comply with the Medicaid regulations so as to gain eligibility, but allow you to remain in about the same financial condition.
Despite the costs, there are advantages to paying privately for nursing home care. The foremost is that by paying privately an individual is more likely to gain entrance to a better quality facility. The obvious disadvantage is the expense; in the Atlanta metropolitan area, the average nursing home fee is approximately $5,000 a month. Without proper planning, nursing home residents can lose the bulk of their savings very quickly
In Georgia, the Georgia Department of Medical Assistance administers the Medicaid program. The local county Department of Family and Children Services ("DFCS") is responsible for determining eligibility. However, in order to qualify for federal reimbursement, the state program must comply with applicable federal statutes and regulations. So the following explanation includes both Georgia and federal law as applicable.
The basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $2,000 in "countable" assets in his or her name. "Countable" assets generally include all of your stocks, bonds, savings accounts, certificates of deposit, and other similar financial accounts. Countable assets even include the total value of joint bank accounts you may have with a son, daughter, or other relative. However a number of exceptions are allowed: (1) personal possessions, such as clothing, furniture, and jewelry; (2) all motor vehicles; (3) the applicant's principal residence (if it is in Georgia); and (4) assets that are considered inaccessible for one reason or another.
The home will not be considered a countable asset and, therefore, will not be counted against the asset limits for Medicaid eligibility purposes as long as the nursing home resident intends to return home or his or her spouse or another dependent relative lives there. It does not matter if it is notlikely that the nursing home resident will ever be able to return home; the intent to return home by itself preserves the property's character as the person's principal place of residence and thus as a non-countable resource. As a result, for all practical purposes nursing home residents do not have to sell their homes in order to qualify for Medicaid.
The other major rule of Medicaid eligibility is the penalty for transferring assets. If an applicant (or his or her spouse) transfers assets, he or she will be ineligible for Medicaid for a period of time beginning on the date of the transfer. The actual number of months of ineligibility is determined by dividing the amount transferred by $3,673.00 (average nursing home cost). For instance, if an applicant made gifts totaling $36,673, he or she would be ineligible for Medicaid for 10 months ($36,673 ÷ $3,673 = 10). Another way to look at this is that for every $3,673 transferred, an applicant will be ineligible for nursing home Medicaid benefits for one month.
Technically, there is no cap on the period of ineligibility. So, for instance, the period of ineligibility for the transfer of property worth $363,730 is 100 months ($363,730 ÷ $3,673 = 100). However, DFCS may only consider transfers made during the 36?month period (60 months in the case of some trusts) preceding an application for Medicaid; this is the "look?back" period. So long as you wait to apply until after the look back period has expired, there is generally only a 36?month cap on periods of ineligibility resulting from transfers. HOWEVER, people who make large transfers and apply too soon may find that the ineligibility period is much more than 36 months. For example, if the person above who transferred the $363,730 applies at 35 months he will have a 100 month penalty. If he waits until the 37 month, there will be no penalty. BE CAREFULL !!!!
Transferring assets to certain recipients will not trigger a period of Medicaid ineligibility. These exempt recipients include:
(1) a spouse (or anyone else for the spouse's benefit);
(2) a blind or disabled child;
(3) a trust for the benefit of a blind or disabled child; or
(4) a trust for the benefit of a disabled individual under age 65 (even for the benefit of the applicant under certain circumstances).
Special rules apply with respect to the transfer of a home. In addition to being able to make the transfers without penalty to one's spouse or blind or disabled child, or into trust for other disabled beneficiaries, the applicant may freely transfer his or her home to:
(1) a child under age 21;
(2) a sibling who has lived in the home during the year preceding the applicant's institutionalization and who already holds an equity interest in the home; or
(3) a "caretaker child," who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided such care that the applicant did not need to move to a nursing home.
The law provides a very important escape hatch for those who find they must qualify for Medicaid during a period of ineligibility. A transfer can be cured by the return of the transferred asset. There is some dispute whether the entire property initially transferred must be returned, or whether the ineligibility period may be shortened by a return of a portion of the original gift. The safest course of action is to return the entire property originally transferred, not a dollar less.
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